Management Accounting - Study Mode

[#301] Costs such as book value of old machines are $25000 can be a classified as an example of
Correct Answer

(C) irrelevant

Explanation

Solution: Costs such as book value of old machines are $25000 can be a classified as an example of irrelevant cost. An irrelevant cost is a cost that will not change as the result of a management decision.

[#302] Sum of working capital and current liabilities is equal to
Correct Answer

(C) current assets

Explanation

Solution: Sum of working capital and current liabilities is equal to current assets.

[#303] Rupee amount for required return of investment is subtracted from income to calculate
Correct Answer

(C) residual income

Explanation

Solution: Rupee amount for required return of investment is subtracted from income to calculate residual income. Residual income is excess income generated more than the minimum rate of return. Residual income is a measurement of internal corporate performance, whereby a company's management team evaluates the income generated relative to the company's minimum required return.

[#304] Return on sales is multiplied to investment turnover to calculate
Correct Answer

(B) return on investment

Explanation

Solution: Return on sales is multiplied to investment turnover to calculate return on investment. Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.

[#305] Formal information systems, used in organizations to focus company's learning and attention given to most important strategic issues are known as
Correct Answer

(A) interactive control system

Explanation

Solution: Formal information systems, used in organizations to focus company's learning and attention given to most important strategic issues are known as interactive control system. Interactive Control System is a management system used to provide strategic feedback, track new ideas, trigger new organizational learning, and to properly position the organization for the future: incorporating process data into management interaction, face-to-face meetings with employees, challenging data, assumptions and action plans of subordinates.